My gut reaction is to oppose the bailout, but more than anything I object to the rush to judgment the administration tried to force upon Congress. No other options were to be explored or considered. Take it or leave it, and you can't even leave it. The history of the past eight years has been the concentration of power in the executive branch, and this bailout would hand over unprecedented power to the Secretary of the Treasury. $700 billion, which many analysts suggest is likely to expand to as much as $2 trillion, to be dealt out pretty much as he wished to Wall Street. A guy, lest we forget, whose last gig was what? Chairman and CEO of Goldman Sachs.
The supposed protections added to the bill over the weekend are pretty much toothless. Almost all of them are up to the discretion of the Secretary.
And another bit of lunacy: one Republican after another got up to call for an alternative to the bailout bill. They want the mark-to-market accounting rule to be relaxed or eliminated. That's the FASB rule that requires investment firms to revise the value of the securities they hold to recognize changes in the market prices of those securities. The plummeting value of securities like collateralized debt obligations, backed by subprime mortgages, has forced huge write-offs on the books of those firms, leading to the downward spiral we're seeing. So the Republicans want to suspend the rule so the firms can continue to pretend those securities are worth a lot more than reality.
The lunatic part of that? Besides the concept itself, of course. The really nutso thing is that the bill specifically authorizes the SEC to suspend the very rule they were railing about. I read the whole damn thing Sunday night before they debated it. Section 132(a) says:
The Securities and Exchange Commission shall have the authority under the securities laws (as such term is defined in section 3(a)(47) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(47)) to suspend, by rule, regulation, or order, the application of Statement Number 157 of the Financial Accounting Standards Board for any issuer (as such term is defined in section 3(a)(8) of such Act) or with respect to any class or category of transaction if the Commission determines that is necessary or appropriate in the public interest and is consistent with the protection of investors.
Statement 157 is precisely the rule in question. In other words, either they hadn't bothered to read the bill or they were totally bullshitting. Take your pick.